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Johannesburg - People living on communal land owned by a community trust in KwaZulu-Natal are set to be given title deeds to their property, a move that could give millions of poor South Africans collateral to raise loans.

Established in 1994, the Ingonyama Trust has custodianship of about 60% of the land in KwaZulu-Natal and is required to ensure it’s used for the benefit of local communities. The board’s sole trustee is King Goodwill Zwelithini.

Zwelithini told the province’s legislature on Tuesday about “the commencement of a process during which people residing on Ingonyama Trust land would acquire title deeds to their land,” Lennox Mabaso, a spokesperson for the Department of Cooperative Governance and Traditional Affairs in KwaZulu-Natal, said in a statement. The process will only apply to land used for residential purposes.

The decision could make it easier for million of citizens to secure land tenure and for some of the nation’s poorest people to pass on property to their children, or to get mortgages against the land. South Africa has about a million households where the residents don’t own the dwelling, according to the country’s statistics agency.

Positive step

“The latest developments in full rights ownership in tribal land is a step in a positive direction in facilitating and promoting house ownership in South Africa,” said Steven Barker, head of secured lending at Standard Bank.

“It’s still early to tell how the bank will respond to this in terms of mortgage lending given certain aspects that need to be addressed such as property registration at deeds offices.”

Simphiwe Mxakaza, a spokesperson for the Ingonyama Trust, said he was still trying to obtain more information about the announcement.

“The king’s statements do not give enough detail of what this would look like and how it would take effect, nor does it refer to a specific government instruction passed at this stage,” Barclays Africa said in an e-mailed response to questions.

“We just don’t have enough to build a view on what this development would mean.”

Nedbank said it was still evaluating the king’s remarks and couldn’t immediately comment. FirstRand didn’t immediately respond to a request for comment.